Daytona’s new projects could open door to year-round, affluent tourists

Saturday

Jan 11, 2014 at 10:14 PMJan 13, 2014 at 9:39 AM

Industry watchers say the new developments will have to be followed by even more new hotels, restaurants and stores.

By Jeffrey Cassadyjeffrey.cassady@news-jrnl.com

DAYTONA BEACH — The Daytona 500. Bike Week. Biketoberfest.If Daytona Beach knows one thing, it’s special events.They have for decades provided short, but intense, bursts of business to the local economy. And for almost as long, getting tourists to come to Daytona Beach after the roars of the stock- car and motorcycle engines die down has proven difficult, as the destination has struggled to compete with other Florida beach destinations and vacation behemoth Orlando.That could start to change in the next few years, observers say, as new and renovated hotels, restaurants and attractions open, giving Daytona Beach the opportunity to shed its honky-tonk image and appeal to a more affluent set year-round.But it won’t be easy, and it will take years — even if all the pieces fall into place. Industry watchers say the new developments — which include a pair of hulking-upscale hotel-and-condominium complexes, a major renovation of Daytona International Speedway and an accompanying shopping and dining center across the street — will have to be followed by even more new hotels, restaurants and stores. And it will be up to the private sector and the local taxpayer-funded tourism marketing organization to sell the new Daytona to a broader array of vacationers. “Daytona Beach has to reinvent itself,” said Abraham Pizam, dean of the Rosen College of Hospitality Management at the University of Central Florida in Orlando. “The beaches are beautiful; the weather is great; but you have to have something exciting. What’s missing there are quality hotels, quality restaurants.”“There has to be a huge paradigm shift in the way we think,” said longtime beachside business owner Paul Politis in reference to the new hotels.To be sure, the consensus among industry watchers isn’t that Daytona Beach should let its special events die on the vine the way it did with Spring Break, which at its peak in the 1980s drew close to half a million visitors to the area annually. (In fact, some even argue that Daytona Beach should once again try to assert itself as a Spring Break destination.)Instead, the destination should try to fill in the gaps between major events like the Daytona 500 in February and the Bike Week and Biketoberfest motorcycle rallies in March and October, respectively, with smaller festivals and a broader range of entertainment options.

Some potentially game-changing projects are already in the pipe. Toronto-based firm Bayshore Capital Inc. plans to open a Hard Rock hotel-and-condominium complex, complete with the brand’s signature restaurant, on the beachside south of Sun Splash Park in 2016. Around the same time, Russian company Protogroup hopes to open an upscale two-tower hotel-and-condominium complex at the eastern end of Oakridge Boulevard on the beachside.The Speedway plans to have its $400 million Daytona Rising modernization completed and One Daytona shopping, dining and hotel center open for business.These projects will join several hotels — including the long-troubled Desert Inn, which will reopen under a national brand — that will be renovated over the next few years.If all goes according to plan, officials say, the new rooms and amenities should appeal to visitors more affluent than the $56,000-per-year-median-income group that currently visits Daytona Beach, according to research done by Duluth, Ga.-based Strategic Advisory Group.That’s a start, Pizam said. The new businesses will have to be successful and will have to draw other new attractions, hotels, restaurants and shops. Pizam pointed to destinations such as Orlando, where fierce competition between resorts, theme parks and other attractions lead companies there to frequently update their products.“Daytona Beach was once well-known for leisure,” he said. “Over the years, the visitor sector started going down very significantly ... The hotels remained the same where other destinations were building resorts and luxury hotels. (Daytona Beach) fell to the side.” Politis, who runs Gator Beach & Sport in Daytona Beach’s core beachside tourism area, said Daytona Beach needs to clean itself up and has to draw nice restaurants and shops — an effort he thinks will take public incentives — to attract the elusive year-round tourist to the beachside. Yet, he isn’t getting his hopes too high for the Hard Rock or Protogroup developments until they break ground. He said he’s encouraged by renovation plans for the Desert Inn and other former low-end beachfront hotels and would like for the existing hotels to raise their rates, which he said would bring more money to the area and yield more marketing money for the Halifax Area Advertising Authority, which uses bed taxes to promote the area. Studies done by Daytona Beach-based Mid-Florida Marketing & Research Inc. suggest that Daytona Beach’s current customer base would pay more for their rooms, Evelyn Fine, the company’s president, told the Volusia County Council at a tourism update during the council’s meeting Thursday.“We have to attract a consumer base that’s affluent, and we need the amenities to support those rooms,” Politis said. “We have no inventory of dining options; we have no diversified shopping, other than gift shops and body-piercing.”Last year, the ad authority conducted focus groups with millennials — adults in their 20s and early 30s — in Cincinnati and Atlanta as a way to reach out to tourists who aren’t part of the typical Daytona Beach demographic. Right now, they aren’t buying. “They’re not us yet, and we’re not them,” Fine said of the millennials.Fine said millennials are diverse, with many preferring active vacations with boutique shopping during the day and nightclubs at night. Others — many who have families — want a quieter, more relaxing vacation. Either way, Daytona Beach doesn’t yet offer what they want. It doesn’t have the restaurants, shops and nightlife to appeal to the active set. Meanwhile, the laid-back crowd views the destination as too noisy and doesn’t like that driving is allowed on the beach.“With the Hard Rock coming in, that will help,” Fine said. “When those things happen, it’s another story. We surely cannot say today that we have the kind of atmosphere they’re looking for.”

New properties or no, ad authority board member Kyriakos Drymonis, who also co-owns Razzle’s Night Club and The Oyster Pub restaurant on the beachside, said Daytona Beach needs to manage its events better — capture the economic benefit of the events while minimizing the drawbacks — rather than do away with them. Drymonis said the beachside has diminished as the motorcycle event crowds have become smaller and Spring Break has been phased out.“We do not need to wean off of special events,” he said. “Each event requires a different approach to managing crowds.”UCF’s Pizam, too, said special events are good for Daytona Beach, and without them the destination would slide even further.“Special events are extremely important to any destination that’s fortunate enough to have them,” said Sharon Mock, a board member for the ad authority who led the organization from 1989 to 2010. “I can’t imagine that we would want to move away from that thought process,” she said. “I do agree that we need to do everything we can to smooth out the bumps.”The key to drawing year-round tourism might not lie in weaning off existing events, but perhaps adding more.Fine said she thinks local businesses and officials should put effort into organizing smaller events, such as car shows and music festivals, and scheduling them for the local tourism industry’s slower months.“We should have a mid-sized special event at least once a month,” Fine said. “We need to make the ground fertile and be in the business of supporting and promoting them.”Pizam agreed that smaller events could help.“But that’s not done overnight,” he said. “It’s not something the government or public sector can do. If you had the investors who could see the potential of the destination you have and they’re willing to put in their money, you could bring more festivals and annual activities.”Another hope is that the renovated and expanded Ocean Center, the 205,000-square-foot county-run convention center on the beachside, will attract meetings and conventions during the less-busy seasons, especially in the autumn and winter.“The fall is prime time for meetings, and convention (planners) are always looking for a great deal while the rates are lower and the weather is still good,” Mock said. “And there’s no place like Florida.”The county completed $82 million in renovations to the Ocean Center in 2009. Since then, the number of events held annually at the convention center has increased, but the number of large events that draw thousands of guests and fill rooms at multiple area hotels is about where it was in 2009.Recent developments, including a transfer of $400,000 from the ad authority to the Ocean Center for marketing, are encouraging, Mock said. But, the Ocean Center, the state’s fifth-largest convention center, has stiff competition.Ocean Center officials and outgoing ad authority Executive Director Jeffrey Hentz, who will step down at the end of February, have in the past said they believe that while Daytona Beach might not be able to compete with Orlando for major events that need large facilities like the Orange County Convention Center, the state’s largest convention center, it might be able to snag some of the smaller, but still sizable, meetings like the ones typically held at Orlando convention hotels.Pizam isn’t so sure.“Unfortunately, it can’t compete with Orlando,” Pizam said of the Ocean Center. “Orlando has such a powerful, powerful convention business, and it’s complemented by the attractions.“Daytona coming in and saying, ‘Me too,’ does not work,” he continued. “Kissimmee has tried it and has not been very successful.”